(EXECUTION MATTERS is a Traders Magazine content series focused on the topics most important to traders and technologists in US equities and options markets. EXECUTION MATTERS is produced in collaboration with Lime Trading Corp.)
It’s well known that options markets are booming. Institutional and especially retail trading of puts and calls has been robust since the early days of the pandemic almost five years ago, and the strength has endured – 2024 trading volume is already at a record with almost a month left in the year.
What’s less well known are the spikes in daily volume that are redrawing the market’s historical top 10 lists.
To wit, at the SIFMA Market Structure Conference – held in New York on November 6, the day after the US presidential election – Pat Hickey, Managing Director, Participant Services and Solutions for Options Clearing Corp., noted that day was on track to be one of the highest-ever volume days.
That proved true, and the 69.4 million total options contracts traded on Nov. 6 landed it in the 4th spot. But the perch was short-lived, as a follow-up query to OCC revealed that 64.8 million contracts traded on Nov. 7, and then 70.9 million contracts traded on Friday, Nov. 15.
Notably, seven of the ten biggest-ever volume days have been in 2024, with the other three in 2023. OCC has compiled data since 1973 and has tracked daily volumes since 2008, and numbers that would be considered spikes ten or even five years ago are more like a current-day new normal.
10 Highest-Volume Days in US Options
- August 2, 2024: 72,625,891
- November 15, 2024: 70,856,016
- February 2, 2023: 70,140,192
- December 14, 2023: 70,010,022
- November 6, 2024: 69,396,953
- March 10, 2023: 68,475,965
- March 8, 2024: 65,431,346
- November 7, 2024: 64,761,447
- August 1, 2024: 64,562,658
- July 11, 2024: 64,285,935
Source: OCC
Recent options trading numbers are a testament to the strength and resilience of options market structure, which spans exchange, trading platforms, and market makers. The highest-volume days require an uninterrupted flow of critical information in real time, especially around the open and close of trading; that’s no mean feat when daily message traffic is measured in the tens of billions. And trade execution must be efficient.
At the SIFMA conference, the What’s Next for Options Market Structure panel discussed volume growth, the competitive landscape among trading infrastructure providers, and whether the market ecosystem can continue to expand without compromising resiliency.
One panelist noted that minor issues always crop up when there is a surge in traffic, but overall, days such as Nov. 6 are helpful tests to market structure. “It’s always a good thing when we have these moments,” the panelist said. “It’s important to our understanding of how we operate as companies, and from a technology perspective.”
For its part, an OCC spokesperson told Traders Magazine that the equity derivatives clearing organization has made several key investments over the last several years to strengthen the resilience of its operations and technology. The company’s infrastructure consistently meets the demands of increased volumes, even as it works diligently on its future platform, Ovation.
Options market participants and observers expect high-volume days to continue, at least for the foreseeable future that includes inauguration day on Jan. 20. Following that will be the early days of the new Republican administration, which may include market-moving policy rollouts such as new tariffs and regulatory changes, as well as signals on fiscal and monetary policy that can impact interest rates.
According to a poll conducted at the SIFMA conference, 56% of respondents expect US listed options volume to increase between 5% and 10% in 2025, while 23% expect growth to be less than 5%.
